Trade primes Africa for energy revolution

Without access to energy, hundreds of millions of people across the African continent are limited in terms of business, education and development. A budding renewable technology boom could turn this upside down.

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Learn why solar powered lamps are a game changer in Malawi 3:33

Energy poverty in Africa

  • An estimated 585 million people in sub-Saharan Africa lack access to electricity (The International Energy Agency)
  • 9.8% of Malawians are connected to the energy grid. This is more than in South Sudan were the number is only 5.1%, less than in neighbouring countries Zambia, Mozambique and Tanzania where 22.1%, 20.2% and 15.3% of the populations are connected to the national energy grid. (The World Bank)
  • Families in the developing world spend as much as 25% of their income on kerosene for indoor lighting (The Energy Access Initiative at the UN Foundation)

When the sun sets across the African hinterlands, most or the activity in villages ceases. Shops close, business comes to an end, and streets are emptied. In order to do their homework, children either turn to kerosene lamps, candles or the dim illumination of street lamps.

Some 600 million people in rural Africa lack access to electricity. In Malawi, where 90% of the population is off the energy grid, an untapped resource is gaining relevance: an average of seven hours of sunshine per day. With improved solar technology and falling prices, the country, and the entire continent for that matter, might be ripe for a new technological jump.

Selling through the schools with teachers acting as agents, parents are primarily buying the lamps so that their children have proper light to study by at night. Education is a big priority for them.

BRAVE MHONIE, FIELD CO-ORDINATOR WITH SUNNYMONEY IN MALAWI

Brave Mhonie
Brave Mhonie, a field co-ordinator with SunnyMoney in Malawi, has made it his mission to reach every Malawian home with solar lights – an ambition that Maersk is helping him achieve. "Children need good light to study by at night," he says. Photo: Felix Sueffert

“The market for solar equipment has been in its infancy for some years, and we are now seeing a significant rise in demand from organisations that distribute to individuals and from authorities for large-scale projects. It holds huge potential, and we expect this trade to boom in coming years,” Bruce Marshall says.

Marshall, ‎Maersk Line’s country manager for the hinterland territories of Zambia, Zimbabwe and Malawi, refers to the imports of solar equipment from Asia. In 2014 alone, Maersk Line shipped solar equipment with a capacity of 400 megawatts to southern Africa from Asia, the equivalent of 5 million solar lights.

The next revolution

Experts are comparing the situation to the spread of mobile phones. Here, many countries with under-developed fixed-line networks achieved rapid mobile telephony growth with much less investment than fixed-line networks would have required, essentially leapfrogging a step in the technological evolution.

A knowledge based economy runs on electricity

Anthoney Leidman

PROFESSOR ANTHONY LEIDMAN, ENVIRONMENTAL-ECONOMICS POLICY RESEARCH UNIT, UNIVERSITY OF CAPE TOWN

The development was helped along by new business models such as pre-paid airtime cards and village ‘telephone ladies’. New approaches are also seeing solar technology reach far into the hinterlands:

“We hold meetings with head teachers across the country, and they talk to their community members who in turn come and buy these lights through the schools,” says Brave Mhonie, a field co-ordinator at SunnyMoney, a social enterprise that sells solar equipment via school networks and local enterprises.

Importing with Maersk Line, SunnyMoney has seen sales exceed one million solar lights in Malawi alone.

Poor man’s treasure
At USD 10 for a small light sufficient to see when reading, solar light represents quite an outlay in countries where average daily wages hover between USD 2-3. This could suggest that there are glaciers in the Antarctica that move with greater speed than the market penetration of solar lights across the African hinterlands, but hard-nosed economics dictate the exact opposite.

Malawi Children
Millions of children in Africa do not have access to energy. After dark, they have to do their homework by candles or turn to streetlamps. Hence, development suffers as well, since a knowledge-based economy runs on electricity. Photo: Felix Sueffert

Hence, ironically, it is the world’s poorest that can best afford the most sophisticated lighting. Off-grid African households easily spend 50-60 cents per day on kerosene lighting and basic charging, so some quick cocktail napkin math points towards a real potential, which is further backed by SunnyMoney’s market experience:

“Selling through the schools with teachers acting as agents, parents are primarily buying the lamps so that their children have proper light to study by at night. Education is a big priority for them,” Brave Mhonie says.

Pay-as-you-go
SunnyMoney sees smaller lights as a stepping stone towards more sophisticated equipment, convincing people that the technology is sound and reliable. Here, new approaches, such as harnessing the broad use of mobile payments in Africa, are also helping spread the equipment to the cash-strapped customers.

One model sees customers paying a deposit for a solar system. Using mobile payments, the customer then pays about 45 cents per day in order to get energy. After 12 months of regular payments, the so-called ‘pay-as-you-go’ arrangement, users acquire full ownership of their solar system and have access to free solar energy.

The International Energy Agency estimates that 500 million Africans will rely on solar powered lighting by 2030. Transported from Asia, solar equipment thus represents a huge business opportunity for Maersk Line, essentially slow-steaming Africa’s next revolution.

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